037: Building And Financing A Custom Built Home

Branden Canvan and Cam Delli-Pizzi are my guests this week.

 

Introduction

This is the “Construction” episode. Kyle talks with Branden Canvan about the actual building and design of a custom home, and Cam Delli-Pizzi from Pillar Financial about getting that dream home financed.

Branden Canvan – Is a Draftsman and Owner of Canvan Design.

Cam Delli-Pizzi – He is a licensed mortgage agent and has completed continuing education courses through the Canadian Securities Institute on a regular basis.His experience as a Branch Sales Manager with HSBC for over nine years and with Citi Financial for three provided him with the experience needed to structure the types of financing opportunities we see on a daily basis.

Key Points (Click the timecode to go to that part of the interview)

  • [3:05] Where do people start with a new build?
    • There is no one place to start. I suggest starting with the design then look for the lot.
  • [6:00] It’s pretty easy to find your local zoning information. Simply Google it.
  • [7:40] Is building an addition to your home the same process?
    • Depends on how much money you are going to put into it. Most additions nowadays turn into rebuilds.
  • [12:00] Septic permit should take 7 to 10 business days and another 2 weeks to get a building permit.
  • [12:25] Development costs run at $20,000, septic permit will cost $1,000, and the building permit cost can run up to $3,000.
  • [14:05] Realistically you can build a house in 4-6 months.
  • [16:00] If someone comes to you with an idea, where does that start with you?
    • $1.50 a square foot is my costs. Then I put together an estimate for materials and labour. Then you take that to your mortgage broker to get financing.
  • [19:10] What 3 things would you tell someone about building their own house?
    • It’s not going to be easy. There will be conflict with others.  Plan ahead.
    • Don’t stress over the small things.
    • Get your finances in order.

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  • [34:00] What are people looking at when we are talking about construction financing?
    • Banks tend to be stricter with financing for constructions than with a private company like Pillar.
    • The banks have draw points at different phases of your builds (35,65, and 95 percent complete). If you are between these points and run out of cash, the bank will not be able to help you.
    • Pillar has unlimited draw points that can be released at any point in construction.
  • [38:00] Tell us about your land draw.
    • A land draw is a loan against the land to help you get started with construction.
  • [40:10] Construction financing is not the expertise of the bank. It is the expertise of a company like Pillar.
  • [41:27] Cam shares a comparison he made between an ‘A lender’ versus using a private company like Pillar.
  • [43:30]How does Pillar help with buying land?
    • You can do a land mortgage in the winter and wait until spring to start. Then we change it from a land mortgage to a building mortgage.
  • [45:20] Are you guys involved with infill?
    • We work with several infill developments.
    • We will give land value, NOT building value.
  • [47:50] What are the top 3 things you would tell someone NOT to do when building their own home?
    • Try not to change costs. Keeping to the original financing will avoid problems in the future.
    • Be organized.
    • Don’t stress.
  • [51:00] Kyles shares his final thoughts.

 

Contact Cam Delli-Pizzi 

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